Newsflash

+++ Credible rumors claimed BMW would continue expanding the top end of its line-up with a flagship model named 9 Series. One of the company’s most influential executives has poured cold water on the reports. “I don’t think you need a 9 Series”, said Klaus Fröhlich, the head of BMW’s research and development department, in an interview. “In this segment, you need 3 cars: an X car, a saloon and an emotional sporty car. And we have them: the X7, the 7-series and the 8-series”, he continued. He pointed out that some of BMW’s competitors are reducing the number of models they send to this segment because sales are dropping all around the world. Besides, models positioned above the X7, the 7-series and the 8-series would risk overlapping with the Rolls-Royce Cullinan, the Ghost, and the Wraith. There’s one exception BMW might make, and we bet you can already guess what it is. The 7-series and the 8-series have a limited amount of appeal in today’s market, but the X7 faces a much brighter future. The X7 could spawn a sportier, swoopier model potentially called X8. It would put an emphasis on style and performance without offering more luxury than its 7-seater sibling; it would be to the X7 what Audi’s Q8 is to the Q7. This positioning will help BMW avoid overlapping. While the 9 Series is dead, assuming it was ever alive to begin with, the X8 is allegedly on track for production. +++

+++ Japan’s major auto and battery manufacturers, including Toyota, Honda and Panasonic, are considering joint procurement of COBALT ; an essential resource for batteries that power electric vehicles, sources said. The envisioned joint venture is likely to be set up in a year or so, with each participating company buying a stake of up to around 10 %, the sources said, at a time when Chinese companies are snapping up cobalt supplies around the world. Nissan, Suzuki, Mazda, Subaru and Mitsubishi are also considering joining the initiative, with Japan’s Economy, Trade and Industry Ministry backing the establishment of the joint company and negotiations with countries possessing cobalt mines, they said. Analysts say that cobalt supplies could fall short of demand as early as 2020 as automakers around the world step up production of electric vehicles, especially in China and Europe, to meet stricter emissions regulations. According to the industry ministry, 54 % of the world’s cobalt supplies totaling 120,000 tons in 2016 came from Congo. The ministry aims to make all new passenger cars in Japan fully or partly powered by electricity by 2050 to cut carbon dioxide emissions. +++

+++ A federal judge in the United States has allowed most claims against DAIMLER to move forward in a 2016 lawsuit by vehicle owners that claims the German automaker’s Mercedes diesel vehicles used illegal software to emit excess emissions. In a ruling, Judge Jose Linares of U.S. District Court in New Jersey also said that claims against auto supplier Robert Bosch can proceed, rejecting a bid by the German companies to throw out the lawsuits. There has been growing scrutiny of diesel vehicles in the United States since Volkswagen admitted in September 2015 to installing secret software on 580,000 U.S. vehicles that allowed them to emit excess emissions. Steve Berman, one of the lawyers representing Mercedes U.S. diesel owners, said “like Volkswagen, Mercedes tried to scam consumers by green-washing its line of diesel cars. With the help of some crafty marketing, and Bosch’s defeat device, the duo set out to rake in profits from unknowing purchasers”. Daimler spokeswoman Andrea Berg said: “These claims are without merit, and we are pleased that the court recognized the deficiencies in some of plaintiffs’ claims. We intend to continue vigorously defending against the remaining claims”. The Justice Department, Environmental Protection Agency, California Air Resources Board and German prosecutors in Stuttgart are investigating Daimler for alleged excess emissions in Mercedes-Benz diesel vehicles. Daimler has acknowledged it faces investigations in Germany and the United States. In October, Daimler said operating profit would fall by more than 10 %, blaming “government proceedings and measures in various regions” related to diesel emissions issues. In 2017, Daimler abandoned plans to seek U.S. approval to sell new Mercedes-Benz U.S. light-duty diesel models. VW pleaded guilty in the emissions scandal and agreed to spend more than $25 billion in the United States to address claims from owners, environmental regulators, states and dealers. Fiat Chrysler Automobiles last month agreed to a settlement worth about $800 million to resolve claims from the Justice Department and California that it used illegal software that produced false results on diesel-emissions tests, but still faces an ongoing criminal probe. Last month, Bosch agreed to pay nearly $131 million to settle claims from Fiat Chrysler diesel owners and resolve all investigations by 47 U.S. state attorneys general into its involvement with diesel vehicles, including into the Volkswagen emissions cheating. +++

+++ Right now, every major automaker is sinking huge amounts of money into developing and producing ELECTRIC cars, having already announced their plans to form an extensive range of EVs. Yet, it’s quite possible that they have badly misjudged market demand and could end up with huge inventories sitting into dealerships’ backyards. Deloitte’s analysts project that, by 2030, there will be a huge oversupply of electrified vehicles as manufacturers’ production numbers will greatly surpass demand. If that scenario materializes, then it will inevitably into a huge upheaval in the automotive industry, the effects of which, although difficult to pinpoint at this point, are going to be dire for many manufacturers. Michael Woodward, UK automotive partner at Deloitte, said: “Whilst there is a distinct trend developing in the EV market, the story is not a clear cut one. As manufacturers increase their capacity, our projections suggest that supply will vastly outweigh consumer demand by approximately 14 million units over the next decade. This gearing up of EV production is driving a wide ‘expectation gap’ and manufacturers, both incumbent and new entrants alike, will need to adapt towards this new competitive landscape”. The consulting firm states that EV prices will become comparable, or even lower than, gasoline- and diesel-powered models by 2024. They also expect 21 million all-electric vehicles to be manufactured over the next decade and assert that the market share for electric vehicles will, indeed, increase, but not as much as automakers expect it to, leading to an oversupply. Last year, a record 2 million electric vehicles were sold worldwide, which is twice the number achieved in 2017 and points to an increased popularity of BEVs (battery electric vehicles). Yet, only one in 250 cars on the road is an EV and Norway, where the Leaf has climbed to the top of the sales charts and EVs account for a healthy 30 %, is a unique case. In contrast, electric and plug-in hybrids represented less than 2 % of total US sales, and just 2.2 % on a global scale. VW, in the aftermath of dieselgate, tied up its future with electrified vehicles, committing to a $50 billion investment and the building of the I.D. sub-brand as well as an EV-exclusive new modular platform. Mercedes-Benz, BMW and the rest have also done the same, driving forward with new EVs and bringing the fight to the likes of Tesla, who pioneered modern electric cars and caught the establishment by surprise. While founder Elon Musk may have over-promised and under-delivered more than a few times in Tesla’s relatively short history, and is only now starting to see a way out of the red, he saw the future before the rest. Moreover, with almost 100,000 vehicles delivered in the last quarter, Tesla is gearing up to achieve its goal of half a million annual global sales, driven mainly by (finally) rolling out the Model 3 consistently. Thus, it became the best-selling premium car in the world’s second-largest market, the U.S., despite the fact that its more accessible version is not available yet. Musk’s company, though, is a minnow compared to the VW Group or Daimler, who want to produce many times as many vehicles. And despite its success, it had to lay off 3,000 employees in order to make the promised $35.000 Model 3 viable. In a couple of decades, the internal combustion engine will, in all likelihood, be just a memory. The problem is that the very same thing that caused its demise may actually result in some brands joining it as well. +++

+++ Mercedes-Benz, Volvo and Opel were among sales winners in the carmarket of FRANCE down 1 % in January while domestic marques Peugeot and Renault saw volumes decline. The drivetrain mix continued to evolve, with diesel sales again falling sharply and a significant increase in electric-vehicle sales. The country’s new-car registrations fell to 155,087 last month, industry association CCFA said, on the same number selling days as January 2018. It was the 5th straight month of declines. Sales at Mercedes-Benz advanced most with a 46 % gain. VW, the best-selling foreign brand, rose 17 %. Among other winners were Volvo, whose registrations rose 33 % and PSA Group’s DS upscale unit, which gained 22 %. At PSA, Peugeot sales fell 5.9 %, a rare sales drop at the brand. Citroen sales rose 1.6 % and Opel sales increased 7.6 %. Renault brand was down 3.4 % and Dacia sales decreased 5.4 %. Among VW Group brands, Audi was down 6.9 %, Seat down 5.3 % and Skoda showed modest growth of 1.5 %. Ford’s volume dropped 15 %. Fiat Chrysler Automobiles had a bad month with Alfa Romeo registrations plunging 57 %, Jeep registrations down 46 % and Fiat brand down 6.8 %. Among Asian brands, Nissan was down 45 % while Hyundai’s volume gained 13 %, Kia sales rose by 6.7 % and Toyota increased sales 5.1 %. BMW Group lost 3.6 %, with growth of 7.4 % at Mini unable to offset a 3.6 % decline for BMW brand. Diesel sales slumped to just 34 % of the market, a 15 percentage point decline from January 2017, and 8 points down from January 2018. Electric vehicle sales jumped to 2 % of the market, a significant gain from January 2018, when they made up just 0.8 %, for a monthly volume gain of nearly 2,000 units. Total hybrid sales inched up to 5.7 % of the market from 5.3 % in January 2018. French sales were affected in late November and December by the widespread “Yellow Vest” protests, when demonstrators blocked access to many suburban shopping districts on Saturdays, reducing foot traffic to dealerships. The protests have diminished in recent weeks but have not completely abated. +++

+++ GENERAL MOTORS will begin the process of terminating over 4,000 salaried workers. The lay-offs are part of an on-going restructuring effort envisioned as a way to make GM a leaner, more efficient, and more profitable company. The firm will begin notifying employees that they’re getting laid off at 7:30 am on Monday morning, but the process of parting with roughly 4,250 workers is expected to take weeks. At this point, it’s too early to tell which departments will get hit the hardest. “We are not confirming timing. Our employees are our priority, and we will communicate with them first”, GM said in a statement. It stopped short of confirming the widespread reports of massive lay-offs, but the writing has been on the wall for months. In November 2018, GM announced plans to cut its global workforce by 25 % and said it would idle 5 North American factories (one in Canada, four in the United States) by the end of 2019. About 1,500 contract workers have already been dismissed from GM and 2,250 employees took a buyout. GM previously stated it needs to cut at least 8,000 positions, which explains why about 4,250 employees will reportedly lose their job in February 2019. The cost-cutting measures will help GM achieve $6 billion in annual cash savings by 2020. It will invest most of that sum into the development of electric and autonomous technology for its next-generation vehicles. +++

+++ Volkswagen is putting the finishing touches to its next-generation GOLF GTI , which promises incremental performance changes rather than a more radical switch to hybrid power as had originally been planned by Wolfsburg. To that end, the 8th generation, due in early 2020, is set to stick with much of the hardware that has made the 7th-generation model such a success, both critically and commercially. That means an updated version of the Audi-developed EA888 2.0-litre turbocharged petrol engine used in the existing Mk7 Golf GTI. Again, like the current car, it will be offered with 2 power outputs: a standard output of around 256 hp and a more powerful 290 hp model badged TCR, which will replace the current Performance version of the GTI. The TCR badge has just been used for the first time on a run-out version of the current Golf GTI and is designed to improve the link between the model and the firm’s GTI TCR racing car. An increase in torque beyond the 350 Nm and 370 Nm of today’s 2 versions of the GTI is claimed to establish new levels of performance. In the case of the higher-spec model, it is said the 0-100 km/h time will be less than 6.0 seconds and the top speed 250 km/h. Gearbox choices will include carry-over versions of today’s 6-speed manual and 7-speed dual-clutch items. As recently as last October, VW had planned to switch the Golf GTI to mild-hybrid power as the performance flagship of a new range of IQ-badged petrol-electric mild-hybrid models. That system is also based around the EA888 engine, and is due to be revealed this year. However, it will not now be used on the Golf GTI, under the instruction of VW Group chairman Herbert Diess, who reversed the decision of his predecessor Matthias Müller. The transversely mounted 2.0-litre 4-cylinder powerplant will be mated to an electric motor and 48V electrical architecture. It is a set-up VW plans to mirror on the smaller 1.5-litre 4-cylinder petrol engine and 2.0-litre 4-cylinder diesel units to be used by the next Golf, due to receive a public debut at September’s Frankfurt show after an unveiling this summer. The GTI is likely to join it at that event. The original plan had been to improve the Golf GTI’s low-end response with electric boosting. Additionally, the technology was to bring a coasting function that idles the engine on a trailing throttle and a recuperation system that harvests kinetic energy during braking. However, VW’s about-turn on hybrid technology should lead to a similar character to today’s car. The new Golf GTI is underpinned by a further-developed version of the existing model’s MQB platform, featuring a MacPherson strut front and multi-link rear suspension in combination with adaptive damping control. Engineers involved in the new car’s development say a lot of attention has been focused on steering accuracy. The electro-mechanical set-up of the outgoing model has been heavily reworked to provide it with added levels of feedback and a more direct ratio. The GTI’s exterior styling isn’t likely be a major departure from what has gone before, but insiders have hinted that the car will have a more extrovert, aggressive look, most significantly around the front grille, which is expected to feature a deeper vent section, and new, slimmer front headlights that take advantage of the latest LED technology. Around the car’s rear wheels, enhanced shoulders are expected to give the car a sportier stance. Buyers will be restricted to just one bodystyle: a 5-door hatchback. The 3-door will no longer be produced. Changes inside include a new digital cockpit with an optional head-up display unit and new switchgear, including a centre console featuring a stubby T-shaped gearlever for DSG-equipped versions. The new GTI is also expected to follow the mainstream model and get a technical overhaul. Most significantly, this includes the integration of a new, larger central digital screen that will have some touch functionality, but also a new tactile control system designed to make the most common control adjustments easier. +++

+++ HONDA ’s fiscal third-quarter profit fell 71 % from a year earlier as airbag recalls and flat vehicle sales offset gains from cost cuts, the company said. Profit totaled 168 billion yen ($1.5 billion), down from 570.3 billion yen a year earlier. Quarterly sales were unchanged at 3.9 trillion yen ($36 billion). Honda has suffered from a massive global recall of Takata airbags whose inflators can explode with too much force, hurling shrapnel into drivers and passengers. At least 23 people have died from the problem worldwide and hundreds have been injured. Honda said it is facing various class action lawsuits in the U.S. related to the airbags. Honda said its settlements for April-December totaled 53.8 billion yen ($493 million) and that it may face more such expenses. Honda raised its profit forecast for the current fiscal year, which ends March 31, by 20 billion yen ($183 million) from an earlier projection, to 695 billion yen ($6.4 billion). That’s down 34 % from the previous fiscal year. +++

+++ In ITALY , new-car sales dropped by 7.6 % in January, as demand for diesel vehicles plummeted. Registrations were 164,864, according to Italy’s Ministry of Infrastructure and Transport. The month had the same number of working days as January 2018. Private customer demand rose by 4.3 %, the third consecutive monthly increase after a 10 % rise in December and a 5.2 % increase in November, according to market researcher Dataforce. All other channels suffered declines, with registrations by short-term rental companies falling 16 %, sales to long-term rental businesses down 19 % and sales to companies down by 6 %. Self-registrations by dealers and automakers fell 13 % and 92 %, respectively. Gasoline cars accounted for the majority of registrations for the month for the first time since 2003. Sales rose 28 % to 74,722 for a 45.1 % share, up from 32.5 % in January 2018. Diesel sales fell 31 % to 68,116 for a 41.1 % market share, down from 55.3 % year-on-year. The share of LPG-powered cars rose to 7.3 % from 6.3 %, while CNG-powered vehicles’ share dropped to 1 % from 1.8 %. Hybrid electric cars took a 5 % share, up from 3.9 %; plug-in hybrid share was stable at 0.2 %. Sales of plug-in hybrids to private customers were limited as customers wait for incentives to cars emitting less than 70 g/km CO2; those incentives will kick-in from March 1st. Market leader Fiat Chrysler Automobiles’ registrations dropped 22 % with all brands except Lancia suffering declines. Fiat registrations fell 29 %, Alfa Romeo lost 45 % and Jeep was down 16 %. Lancia posted a 55 % jump and the Ypsilon, its only model, was the second most popular car in Italy after the Fiat Panda. Sales of the Ypsilon to private customers jumped 54 % to 3,351, while demand from short-term rental companies grew fourfold to 1,629. PSA Group topped foreign automakers with Peugeot brand sales gaining 4 %, Citroen up 2 % and Opel posting a 10 % increase; premium brand DS suffered a 4 % decline. Altogether, the 3 mass market brands of PSA took a 18.2 % share of the Italian market, just shy of the 18.8 % of FCA’s Fiat and Lancia mass market brands. Within the Volkswagen Group, VW brand registrations rose 11 %, while Skoda was down 11 % and Seat sales dropped by 6 %. Audi and Porsche registrations fell by 37 % and 59 %, respectively. VW’s T-Roc jumped to 4th place among the market’s best sellers. Renault brand registrations dropped 14 %, while sister brand Dacia sales jumped 26 %, fueled by high demand for the Duster. Ford deliveries were down 11 %. Among the big Asian brands Kia posted a 9 % gain. Other brands has a bad month. Nissan’s registrations plunged by 36 % and Hyundai sales fell by 12 % and Toyota was flat (-0.35 %). BMW and Mercedes-Benz both gained 1 %. +++

+++ The long wait for the next JUKE is nearing its end: the second-generation of Nissan’s big-selling small crossover will be revealed at some point in 2019. Recently, Nissan Europe small car marketing boss Helen Perry told: “The current Juke is in the latter period of its life. For sure, in the next year you’ll hear more about the new Juke”. The current model is nearly a decade old, having hit roads for the first time in 2010. It’s almost certain that the second-generation Juke will take on a new platform, in the shape of the CMF-B architecture underpinning the recently revealed Renault Clio V that supports electrification, and a hybrid Clio has been confirmed. Asked if Nissan could go after the success of the Hyundai Kona Electric with a full EV option, Nissan’s European product planning chief Peter Bedrosian said: “People are moving from sedans and hatches into SUV-type vehicles, that’s happening globally, not just in Europe. And on top of that here’s electrification, so it’s a perfect combination. We’re working on several powertrain options at the moment”. Since its launch in 2011, the original Nissan Juke has been a huge success story for the brand, arguably sparking the market trend of the supermini-SUV. However, in recent years, the Juke has came under pressure from rivals such as the Peugeot 2008 and the Renault Captur, and even premium cars like the Audi Q2, forcing the Japanese brand to revise its formula. It will improve on the current car in as many ways as possible to tackle its growing list of rivals. The existing Juke still sells well, with over 100,000 examples finding homes globally each year but with new rivals emerging all the time an update on the winning formula is needed. Previously, Nissan’s chief creative officer Shiro Nakamura revealed the next generation will remain “edgy and less mainstream”, but acknowledged that it would still be recognisable as a Juke. The styling, therefore, will likely retain key Juke cues, such as the high-mounted headlights and distinct wheel-arch blisters, but it will incorporate the new Nissan ‘face’ seen on the latest Qashqai. Plus, there’ll be a slightly longer wheelbase, as Nissan aims to address one of the main criticisms of the current model; rear legroom. The Juke’s interior is set for a major overhaul, potentially taking its lead from the next Micra. Nissan looks to improve on quality, with a range of soft-touch plastics, higher-grade fabrics and materials, and an improved central infotainment display across the range, complete with smartphone connectivity, Apple CarPlay and Android Auto. The Juke’s cabin will also get a wider range of personalisation options, including different colours and finishes on the facia highlights. The move to the new CMF-B platform will open up the Juke to a new range of engines. Options include a 1.0-litre 3-cylinder petrol, a 1.5-litre diesel and a 1.33-litre turbocharged petrol that’s likely to be the range-topper, with an output of around 150 hp. Nissan has also hinted that the next Juke could get a hybrid variant, using a range-extender powetrain that debuted on the sporty Gripz concept at the 2016 September Frankfurt Motor Show. When asked if the new Juke would feature a form of electrification, Nakamura told: “It is very tough to meet our emissions requirements without hybrid. It is almost mandatory”. +++

+++ Britain promised NISSAN up to $104 million of support and offered Brexit-related assurances to help secure a major investment from the Japanese carmaker in 2016, according to a well-guarded letter. Nissan said in October 2016 that it would build the next generation of its Qashqai and X-Trail at its northern English Sunderland plant, but it has cancelled plans to build the X-Trail as diesel sales slide in Europe. The original decision, which would have created 740 new jobs, was hailed by Prime Minister Theresa May, who had newly taken office at the time, as a major boost to Britain as it began the process of extricating itself from the European Union. But the letter, which the government refused to publish on multiple occasions, had prompted accusations that ministers were doing secretive deals with firms, prompting some Brexiteers to question whether pledges made might keep Britain tied to EU mechanisms such as the customs union. “The government fully recognizes the significance of the EU market to your presence in Sunderland”, wrote business minister Greg Clark to then Nissan boss Carlos Ghosn. “It will be a critical priority of our negotiation to support UK car manufacturers and ensure that their ability to export to and from the EU is not adversely affected by the UK’s future relationship with the EU. We will set our ambitions high and vigorously pursue continued access to the European market as an objective in future negotiations”. The up to $104 million of support on skills, research and development and innovation was contingent on the new Qashqai and X-Trail models being built in Britain, Clark wrote. Clark told parliament that as the terms of Nissan’s investment had changed, they would need to re-apply for the funding. He said that of the $80 million worth of grants which had already been approved, only $3.5 million had so far been paid to Nissan. Nissan, which builds 30 % of Britain’s 1.52 million cars at its factory, the country’s biggest car plant, exports the vast majority of the vehicles to EU countries and, like the rest of the industry, is worried about tariffs if there is a no-deal Brexit. “The letter, written in October 2016, shows Nissan and the UK Government’s continued desire to support investment in the UK and maintain Sunderland as one of Nissan’s manufacturing hubs in Europe”, the company said. The firm will still build its new Juke and Qashqai models at the factory which opened in 1986 after then prime minister Margaret Thatcher successfully encouraged Japanese companies to pick the country as a gateway into Europe. Brexit uncertainty has since prompted consternation in some boardrooms in Tokyo. On Feb 1, an EU-Japan free trade agreement also kicked in, which includes the EU’s commitment to removing tariffs of 10 % on imported Japanese cars, diminishing part of the business case for building in Europe. Union representatives met Nissan representatives and said they would push to secure the future of the site. “Unite will continue to press for further long-term guarantees over future investment and new models to secure the site’s future for generations to come”, said acting national officer for the automotive sector Steve Bush. +++

+++ RENAULT ’s appointment of a new leadership duo to replace the detained Carlos Ghosn should ease tensions with Japanese partner Nissan, analysts say, although the French state’s close involvement remains a brake on ties. Ghosn was the linchpin of the 3-way alliance that also includes Mitsubishi, credited with driving together a sometimes fractious threesome with headquarters 10,000 kilometers apart to become the world’s top-selling auto group. But his shock arrest in Tokyo on charges of financial misconduct immediately drove a wedge between Nissan and Renault, with dark mutterings in Paris of a “coup” orchestrated by CEO Hiroto Saikawa to depose his former mentor and seize more power within the group. Saikawa himself confessed that communications had been “a bit difficult” since the arrest, noting that while Nissan had immediately jettisoned Ghosn as chairman, Renault kept him on as they awaited evidence against him. However, the appointment of old Asia hand Thierry Bollore as permanent CEO and Jean-Dominique Senard from tire manufacturer Michelin as chairman, should open a “new chapter” in ties, Saikawa told reporters in Tokyo. Janet Lewis, head of transportation research at Macquarie Capital Securities, told the alliance was “in many respects an unprecedented success story” and said it was “positive that Renault is moving forward” with the new appointments. But she added: “I believe it is less helpful that the French government seems to be so involved in the alliance”. Much of the tension between the partners stems from a complex ownership structure that gives Renault 43 % of Nissan and the French state just over 15 % in Renault, making Paris the pivotal player. Nissan now outsells its French counterpart and its broad global footprint means it deserves to be seen as more than a junior partner, said Lewis. “Renault should be prepared to alter the working relationship to reflect what Nissan brings to the table; among other things a very strong position in both North America and China, markets where Renault has limited to no presence”, the analyst told. Seen from Nissan’s perspective, the “strong interference” of the French state is “not fair”, according to Takaki Nakanishi, an auto analyst based in Tokyo. Ghosn rescued Nissan from the verge of bankruptcy by tying it to the alliance but now the Japanese firm “has a passion to be independent. They do not want to be part of the French state”, said Nakanishi. “They need to reduce their stake. That is the only solution to regain trust and make the alliance workable”, added Nakanishi, as reports in the Japanese media said Paris was pushing for a full-on merger. Gaetan Toulemonde, a French auto analyst at Deutsche Bank, told that French interference is a problem and urged Renault to reduce its stake in Nissan. “Don’t forget Volvo more than 20 years ago. The marriage broke up because of the French state”, said the expert, referring to a failed merger between Renault and the Swedish manufacturer. Despite ongoing strains, analysts generally agree the 2 firms are now so closely interconnected that a split would be catastrophic. They need each other to develop the technology for electric vehicles, automated driving and connected cars, as well as to compete with the likes of Toyota and Volkswagen, said Lewis. “Given their platform development for the next decade is already intertwined, divorcing now would be difficult” she added. Nakanishi agreed, saying it would now be “impossible” now to end the alliance. “It took 20 years to get to this level. It would take 20 years to unwind”, he said. But Renault is also deeply ingrained in the economy and psyche of France, making any reduced presence politically sensitive. “I want the French people to know: not a day goes by where we are not following as closely as possible the situation of Renault and the alliance”, said Economy Minister Bruno Le Maire. And the bond between France and Renault was summed up in an editorial in the regional French press after the appointments were made public. “Which family has not one day driven in a Renault. It embodies the car of the people”. Referring to French rock star Johnny Hallyday, the editorial concludes: “Renault is to the car what Johnny was to French music. National property”. +++

+++ SUBARU said it did not pay overtime wages over a 2-year period to some 3,400 employees who underreported their hours, a revelation that surfaced in an internal probe following the 2016 suicide of an overworked employee. The automaker said the outstanding wages (from mid-2015 to mid-2017 and totalling $7.08 million) were paid retroactively to 3,421 workers last March. The news was first reported by Japanese media after representatives of the deceased worker’s family disclosed some of the findings this week. In 2016, a 46-year-old white-collar worker jumped to his death from the roof of a Subaru factory in what authorities ruled was a case of karōshi (death from overwork). At the time, Subaru was enjoying bumper sales and profit due to the popularity of its cars in the United States, its main market. In its probe, Subaru found the majority of workers it surveyed said they underreported overtime hours “so as not to exceed the limit for the budget for overtime work”. It said it has since taken steps to make sure workers are unable to falsely report their actual working hours. The automaker also said it owed the deceased worker overtime pay and that it remained in settlement talks with his family. The pay issue comes after the revelation of governance lapses at the automaker since 2017 involving flawed vehicle inspections. That has led to the recall of hundreds of thousands of cars, pulling down Subaru’s profit. +++

+++ TESLA is gearing up to manufacture the Model Y crossover at its Gigafactory on the outskirts of Reno, Nevada. Speaking during a conference call, company co-founder and CEO Elon Musk announced Tesla is currently creating the tooling it will use to build the Model Y. Wired learned the Model Y will share about 75 % of its parts with the Model 3, but the 2 cars will be assembled in different factories. Tesla makes the 3 in its Fremont, California, facility using battery packs sourced from the Gigafactory. Using existing parts should help Tesla ramp up Model Y production smoothly and quickly; mass-producing the Model 3 was anything but. The crossover will make its debut in the coming months, but it may not reach volume production until the end of 2020. While pricing hasn’t been announced yet, it’s reasonable to assume buyers will be able to reserve the Y by sending the company a refundable deposit. Tesla will begin taking orders during the model’s unveiling. In January 2019, an unconfirmed report claimed the Model Y will come exclusively with all-wheel drive. It will offer at least 400 kilometres of driving range, and it could boast level four autonomous capabilities thanks to a Tesla-designed radar system and more cameras. Tesla hasn’t confirmed this information, and it hasn’t shed much insight into what we can expect from its second crossover. Musk and his team are betting big on the Model Y. They predict between 50 and 100 % more demand for the crossover than for the Model 3, which Tesla claimed was the best-selling premium car in 2018. Crossovers easily outsell sedans in the United States, so this estimate may not be wide of the mark. +++

+++ TOYOTA and its group firm Daihatsu are trying to keep their prices steady in Indonesia’s increasingly competitive and affordable minivan market, offering 2019 models at the same prices as last year. Toyota-Astra Motor launched new models of the Avanza and the Veloz last week, while Astra Daihatsu Motor introduced its Grand New Xenia. Henry Tanoto, vice president of Toyota-Astra Motor, known as TAM, said the company set the prices for the new models after studying production costs, exchange rates and expected sales volume as well as acceptable retail price ranges. “We have decided that the prices should be the same as in 2018. Hopefully Indonesian people will find them acceptable”, he said. Astra Daihatsu Motor, a local Daihatsu unit known as ADM, has decided against price increases in a gesture of appreciation to loyal customers. “New Xenias can be owned at the unchanged prices. It’s a manifestation of our commitment to our customers”, said Amelia Tjandra, ADM marketing director at Daihatsu BSD Astra Biz Center in South Tangerang on Java. Toyota and Daihatsu began producing low multipurpose vehicles, or LMPVs, an affordable range of MPVs also known as minivans, in Indonesia in 2003. Avanzas and Xenias are popular, but they are facing increasingly fierce competition from Japanese rivals: Suzuki’s Ertiga, Nissan’s Livina, Honda’s Mobilio and Mitsubishi’s Xpander and Wuling. Yoshihiro Nakata, TAM president, said even though Toyota’s LMPVs still lead the Indonesian market, the company is concerned about competition, noting that the “LMPV market competition is getting tighter”. TAM remains optimistic that Avanza will maintain its large market share of nearly 30 % in Indonesia, accounting for more than 70 % of Toyota’s total wholesale figure. “Our sales have been increasing steadily every year. In the January-November period, total Avanza sales at the wholesale level were 75,493 units, with a market share of 28 %”, TAM’s Tanoto said. “With the introduction of the more stylish and modern model, we have set the market share target for this year at 30 %”. This year Toyota predicts Indonesia’s LMPV market will grow around 5 %. Toyota has set the sales target for the new Avanza and Veloz within a range of 7,000 to 7,500 units per month, Tanoto said. “Currently there are a total of 7 brands competing in the LMPV segment”, ADM’s Tjandra said. “We must build a stronger strategy so that this year’s sales, especially those for Xenias, will increase by 20 % compared to last year”. The Association of Indonesia Automotive Industries forecast that domestic vehicle sales will increase by 5 % to 1.05 million units this year on the back of the government’s solid economic growth target of 5.5 %, but the combined LMPV sales target by carmakers is estimated to be around 1.1 million units. “Therefore, it is possible that the automotive industry will not easily increase prices for new models”, Jongkie D. Sugiarto, chairman of the association, told NNA. Based on association data, LMPVs have a 30 % share of total vehicle sales. +++

+++ The Volkswagen T-ROC R, the hottest version of the firm’s compact SUV, has been confirmed for production. The front bumper has a larger, deeper air dam than the standard car, and appears to extend almost the full width of the body. It also sits lower to the ground, and it shares its 19-inch wheel design with the Golf R. At the back, the bumper has changed shape to accommodate quad tailpipes; another feature borrowed from the Golf. Speaking at the annual ‘GTI Treffen’ VW meet at Lake Worthersee in Austria in May 2017, Diess told that while the GTI brand will be reserved for performance-oriented hot hatchbacks, the R brand has more potential. “We have a second sub brand which is R. GTI has something to do with the hatch and this size of car; we shouldn’t expand this brand. For high-performance SUVs there is definitely customer demand. There are some premium cars there already that are quite successful. I agree that it is a good fit for the brand”. We’ve already seen that the Cupra Ateca (the first dedicated spin-off from Seat’s new performance brand) is on the way, and the VW T-Roc R is likely to use the same powertrain. That means power will come from a 2.0-litre turbocharged petrol engine; a unit also used by the Golf R. In the Golf it makes 306 hp and 400 Nm, and is transferred to the road through all four wheels. It’s very likely that the T-Roc will offer a very similar set-up – possibly in a slightly detuned state so that it doesn’t tread too firmly on the Golf’s toes. +++

+++ In the UNITED STATES , Toyota reported a 6.6 % fall in U.S. vehicle sales for January, hurt by lower demand for its Camry and Prius. The No.3 automaker in the United States by sales said it sold 156,021 vehicles in January, down from 167,056 vehicles a year earlier. Camry sales fell 3.4 %, while Prius sales slumped 57 %. Auto industry consultants J.D. Power and LMC Automotive forecast January auto sales to decline about 1 % from the same month in 2018, partly due to uncertainty over the recent government shutdown. The auto consultants also forecast total light vehicle sales this year to fall 1.9 % to about 17 million units, compared with 2018. However, major automakers are bullish about 2019 sales even as economists warned that rising interest rates may discourage consumers from buying cars this year. General Motors and Ford, the 2 big automakers that together commanded a 32 % market share in 2018, have stopped reporting monthly sales numbers, opting to report on a quarterly basis. Bloomberg, however, reported late on Friday that Ford’s sales rose 7 %, while GM’s fell 7 % in January, citing people familiar with the matter. Smaller rival Fiat Chrysler Automobiles reported a 2 % rise in U.S. auto sales for January, helped by higher demand for its Ram pickup trucks and said it expects strong sales in 2019. “In spite of some frigid January weather, we remain bullish on 2019 given the continued underlying strength of the U.S. economy”, Reid Bigland, Fiat’s U.S. head of sales, said. Fiat Chrysler said it sold 136,082 vehicles last month, compared with 132,803 units for the same period a year earlier. Sales of Ram pickup trucks surged 24 % to 39,649 vehicles in January, compared with the same period a year earlier. +++

+++ VOLKSWAGEN ’s strategy boss says the firm is prepared to offer its new MEB electric car architecture to other manufacturers, and is in talks with several major rivals. The Volkswagen Group has invested heavily in developing the versatile pure-electric MEB platform, which will first be used on the production version of the ID hatch concept later this year. It will then be quickly rolled out across the group’s brands on a wide range of EVs. Volkswagen recently agreed a wide-ranging alliance with Ford that could lead to the Blue Oval producing electric cars built on the MEB platform and Michel Jost, VW’s strategy chief, says the firm is evaluating more tie-ups. In an interview, Jost said of the MEB platform: “I think we are industry forerunners in terms of cost and scalability. Therefore, we want to offer access to MEB, by making it available to the entire industry. This represents a paradigm shift to us”. Jost added that he was in “advanced” talks with competitors, including several who were “in the volume segment”. The Volkswagen Group is aiming to offer more than 50 electric cars (most of which will be built on MEB) by 2023. In the interview, Jost also confirmed that the firm is aiming to offer a T-Cross sized electric model for less than €25,000 by 2024. +++